New-business development takes back seat to calming "shell shocked" clients. In the midst of a year-long financial crisis with no obvious end in view, independent investment advisors are more focused on keeping the business they have than on trolling for new clients. That's the main takeaway from a mini poll of 30 RIAs by Charles Schwab, whose Institutional Services division provides support services to RIAs and to retirement-plan sponsors and administrators.

The results of the poll, conducted in November and December 2008, can be seen as a precursor to Schwab's much bigger RIA Benchmarking Study, which is now in the data-gathering stage and slated for release in mid 2009.

In sum, 71% of the 30 advisors surveyed late last year said focusing on existing client relationships was their priority with 96% making it one their top two priorities.

Numb by November

"Almost every advisor we talk to is focused on helping their existing clients through this difficult time, and rightfully so," says Trish Cox, COO of Schwab Advisor Services (formerly Schwab Institutional), a part of Schwab's Institutional Services division that provides custody, trading and related consulting and technology services to about 5,500 RIAs. "The common thread we see with most firms is a strong emphasis on reaching out to clients proactively through one-on-one conversations and broader communications that educate and ease their concerns."

This publication made similar findings last year. In October particularly, independent investment advisors were run ragged reaching out and responding to worried clients in the face of financial-market turmoil and surprisingly aggressive U.S.-government involvement with large financial-service companies. By late November, we found that RIAs saw client outreach as vital as ever, but their perception of the predominant sentiment among clients had gone from something close to panic to a kind of wide-eyed paralysis.

"People are numb," Carlos Lowenberg of Austin, Texas-based Lowenberg Wealth Management Group told FWR at the end of November 2008.

Tom Courtney of Burns Advisory Group in Oklahoma City, Okla., used the term "shell shock" to describe the mood among some clients just after Thanksgiving last year. "People have had to absorb a lot in a very short period of time," he said, referring to the wide-spread malaise that had been gripping markets since September when the U.S.-government took over mortgage-market makers Fannie Mae and Freddie Mac, and embarked on a campaign of keeping big-name financial-service firms from suffering Lehman Brothers' fate.

These were the 10 top priorities among the 30 advisors Schwab polled in November and December last -- classified as "very" or "extremely" important to them. Six of them have to do with client communications, and two focus on intra-firm outreach.

One-on-one communications initiated by your firm (97%); more important now than 12 months ago (50%) Communicating proactively with clients via email, letter, calls (96%); more important now than 12 months ago (83%) One-on-one communications initiated by your client (94%); more important now than 12 months ago (53%) Investing time in retaining clients (93%); more important now than 12 months ago (80%) Client communications on investment approach (93%); more important now than 12 months ago (63%) Communicating within firm on investment decisions (87%); more important now than 12 months ago (60%) Principal (as opposed to staff) time returning calls (83%); more important now than 12 months ago (60%) Aligning current objectives between leadership and staff (77%); more important now than 12 months ago (57%) Investing time in marketing/business development for new clients (70%); more important now than 12 months ago (43%) Streamlining operations process (70%); more important now than 12 months ago (47%)

But RIAs haven't lost focus on the future, according to Schwab. More than two thirds (67%) rank medium- to long-term business planning as an important priority, and more than half saw increased technology spending as a necessity, whether as an aid to client communication (60%), other client-support functions (56%) or investment-platform support (46%).

The RIAs Schwab polled in November and December range in size from $186 million to $5 billion in assets under management.

Schwab Advisor Services' end-client assets declined 18.3% from $584 billion at the end of 2007 to $477.2 billion at the end of 2008. -FWR

Purchase reproduction rights to this article.